- Apollo program: 4%
- Railroads: 6% (mentioned by the author)
- Covid stimulus: 27%
- WW2 defense: 40%
- 40% of long-distance ton miles travel by rail in the US. This represents a VAST part of the economic activity within the country.
- A literal plague, and the cessation of much economic activity, with the goal of avoiding a total collapse.
- ...Come on.
So we're comparing these earth-shaking changes and reactions to crisis with "AI"? Other than the people selling pickaxes and hookers to the prospectors, who is getting rich here exactly? What essential economic activity is AI crucial to? What war is it fighting? It mostly seems to be a toy that costs FAR more than it could ever hope to make, subsidized by some obscenely wealthy speculators, executives fantasizing about savings that don't materialize, and a product looking for a purpose commensurate to the resources it eats.
Like 1.2% isn’t a big percentage, but neither is 3.4% - our total military expenditures this year.
Slightly off-topic, but ~9% of GDP is generated by "financial services" in the US. Personally I think it's a more alarming data point.
Financial services makes the unrealistic consumption of rich countries possible. That’s worth 9%.
The continued devaluing of skilled labor and making smaller pools of workers able to produce at higher levels, if not their automation entirely.
And yeah AI generated code blows. It's verbose and inefficient. So what? The state of mainstream platform web development has been a complete shit show since roughly 2010. Websites for a decade plus just... don't load sometimes. Links don't load right, you get in a never-ending spinning loading wheel, stuff just doesn't render or it crashes the browser tab entirely. That's been status quo for Facebook, YouTube, Instagram, fuck knows how many desktop apps which are just web wrappers around websites, for just.. like I said, over a decade at this point. Nobody even bats an eye.
I don't see how ChatGPT generating all the code is going to make anything substantively worse than hundreds of junior devs educated at StackOverflow university with zero oversight already have.
The finance industry's ability to teleport value across time and space is a massive boon for quality of life across the world.
* Movement of capital from other fields to "AI". * Duration of asset value (eg, AI in months/years vs railroad in decades/centuries). * "Without AI datacenter investment, Q1 GDP contraction could have been closer to –2.1%".
Wow, then the cheapest servers which run the poorest uploaded consciousnesses (correct plural ?), would also likely be the worst cooled.
Making it a cold day in hell if the incentives of humanity ever change.
I will never understand people who use tiny European countries as meaningful comparisons to continent sized ones.
Literally every profession around me is radically changing due to AI. Legal, tech, marketing etc have adopted AI faster than any technology I have ever witnessed.
I’m gobsmacked you’re in denial.
More than a decade long. The technology and industry here was broadly shared. They did things like highjacked bra manufacturers to make space suits.
> Railroads: 6% (mentioned by the author)
We're still using this investment today.
> Covid stimulus: 27%
The virus that was killing us the fizzled is probably not the best example... Only arguments will ensue if I even attempt to point thing out in this one.
> WW2 defense: 40%
I mean Russia made its last lend lease payment in 2006. It lead to America dominance of the globe. It looks like an investment that paid it self off.
How much of the hardware spend on AI is going to be usable in 5years?
There are some deep fundamental questions one should be asking if they pay attention to the hardware space. Who is going to solve the power density problem? Does their solution mean we're moving to exotic cooling (hint: yes)? Have we hit another Moores law style wall (IPC is flat and we dont have a lot of growth left in clock, back to that pesky power and cooling problem). If a lot of it is usable in 5 years thats great, but then the industry isnt going to get any help from the hardware side and thats a bad omen for "scaling".
Meanwhile capex does not include power, data, constables or people. It may include training, but we know that can't be amortized. (how long does a trained system last before you need another, or before you need a continuation/update).
Everyone is going after AI under the assumption that they can market capture, or build some sort of moat, or... The problem is that no one has come up with the killer app where the tech will pay for itself. And many in the industry are smart enough not to try to build their product on someone else's platform (cause rug pulls are a thing).
"AI" could go the way of 3d tv's, VR, metaverse, where the hype never meets up with hope. That doesn't mean we wont get a bunch of great tooling out of it. It is going to need less academics and more engineering (and for that hardware costs have to drop...)
But then we saw the same thing with Crypto, tons of money poured into that, the Metaverse was going to be the next big thing! People who didn't see and accept that must not understand the obvious appeal...
The population of Queens and Brooklyn is one of the most densely populated areas on the planet. I will never understand people who use massively outlier-sized cities as meaningful comparisons to nations.
Each of the 15 charts would have been a page of boilerplate + Python, and frankly there was a huge amount of interdisciplinary work that went into the hundreds of thought steps in the deep reasoning model. It would have taken days to fill in the gaps and finish the analysis. The new crop of deep reasoning models that can do iteration is powerful.
The gap between previous "scratch work" of poking around a spreadsheet, and getting pages of advanced data analytics tabula rasa, is a gap so large I almost don't have words for it. It often seems larger than the gap between pen and paper and a computer.
And then later, off of work, I wanted to show real average post-inflation returns for housing areas that gentrify and compare it with non-gentrifying areas. Within a minute all of the hard data was pulled in and summed up. It then codes up a graph for the typical "shape of gentrification", which I didn't even need to clarify to get a good answer. Again, this is as large a jump as moving from an encyclopedia to an internet search engine.
I know it's used all over finance though. At Jane Street (upper echelon proprietary trading) they have it baked into their code development in multiple layers. In actual useful ways, not "auto completion" like mass market tools. Well it is integrated into the editor and can generate code, but there is also AI that screens all of the code that is submitted, and an AI "director" tracks all of the code changes from all of the developers, so if a program starts failing an edge case that wasn't apparent earlier, the director will be able to reverse engineer all of the code commits, find out where the dev went wrong, and explain it.
Then that data generated from all of the engineers and AI agents is fed back into in-house AI model training, which then feeds back into improvements in the systems above.
All of the dismissiveness reminds me of the early days of the internet. On that note, this suite of technologies seems large. Somewhere in-between the introduction of the digital office suite (word/excel/etc) and perhaps the Internet itself. In some respects, when it comes to the iterative nature of it all (which often degrades to noise if mindlessly fed back into itself, but in time will be honed to, say, test thousands of changes to an engineering Digital Twin) it seems like something that may be more powerful than both.
Trivially verifiable by Visa’s revenue being $35B, which is not even close to 1% of just US GDP (about $30T).
And the industry itself greases the wheels of other industries. In other words without financial services like lending and payment processing there would be less spending and investment overall, so other industries would shrink along with it.
More concerning to me are that these visualizations are not so trivial to find. Here's one
https://www.bea.gov/system/files/gdp1q25-3rd-chart-03_0.png
Health care is growing but not as much as real estate
The Q1 GDP comment is stunning because what it says is that if the same Q1 had happened just two years ago there’s a very good chance we’d be looking at a modestly sized recession. Now of course things aren’t zero-sum and it’s impossible to really make a useful claim like that but it’s still striking.
Banking used to really suck. Walk into an old bank building and it looks empty with spaces for a dozen tellers never actually used, this is a good thing as nobody actually wants to stand in line at a bank. People have largely stopped using cash because swiping a card is just more pleasant.
Meanwhile payment networks (Visa, Mastercard) have over a 50% profit margin, that’s a huge loss for the US economy. Financial services dropping to 1% of the overall economy would represent a vast improvement over the current system.
He was convicted of fraud a few years later.
so presumably, the people spending those money have considered the opportunity cost and reckoned it be worth it.
Unless you proposed some alternative which would've been better, you cannot say that those spending were bad because "opportunity cost".
If it were, why do we have more than one company?
> I take your point that companies themselves are usually centrally planned internally
Well, sort of. It is true that companies exist solely for the reason of exploiting efficiencies in central planning. If central planning was always inefficient, companies wouldn't exist! But, as I alluded to earlier, no company has found central planning to be efficient in all cases. Not even the largest company in the world centrally plans everything. Not even close.
As with most things in life, a bit of balance will serve you well.
Singapore: 5.6%, 82.9
Israel: 7.2%, 83.2
Estonia: 6.9%, 78.5
Poland: 6.7, 78.5
Luxembourg: 5.7%, 83.4
Czech Republic: 8.1%, 79.9
France: 11.9%, 82.9
Japan: 11.5%, 84
Portugal: 10.5%, 82.3
Spain: 10.7%, 83.9
I refuse to believe this will not have long term consequences.
I WISH that after this, companies will put up quality guardrails to basically offer the same product 60% cheaper at better quality, but I don't trust companies.
The Retail Bank's main function isn't providing cash either, it's keeping deposits which they loan out for profits. Whether you use cards or cash won't affect those margins.
Interesting to see countries like Spain and Italy, where the spend is one third of the US but the life expectancy is significantly higher.
visa is saving the country a lot of time/money.
This drives an enormous amount of innovation, and the near complete dominance of US healthcare companies in the west reflects that.
The US moving to a universal healthcare model would likely kill the lucrative US market, and while providing cheaper healthcare, it likely wouldn't make them dramatically cheaper while also having the effect of driving up costs in other western countries.
A bit like a balloon, where the profits are swelled in the US and limp elsewhere, squeezing the US will ha global effects.
Or your retirement account. Everyone is mad about investors and companies making money. Sure, there are ultra wealthy people (mostly founders) that benefit disproportionately. However, most people who hope to retire some day rely on a 401k, pension, etc which is dependent on stocks. Retirement accounts have about $36T in the US, mostly in equities and corporate bonds.
Typically, central planning does not imply micromanagement. The "broad direction" you speak of is the central planning.
> Companies are reorganizing for efficiency all the time.
But, of course, companies wouldn't exist if markets were perfectly efficient. The sole reason for companies is to exploit the efficiencies of central planning. But, of course, just as if markets were perfectly efficient there would be no companies, if central planning was perfectly efficient there would only be one company, so... Like always, there are tradeoffs that we have to find balance in.
While LLM’s are nowhere near this capacity today, it’s likely future AI systems will be able to handle such complexities just fine. Competition + automation means the financial sector really is on a long term decline. Some things aren’t automated due to customer preference, but preferences change over time.
> The Retail Bank's main function isn't providing cash either, it's keeping deposits which they loan out for profits. Whether you use cards or cash won't affect those margins.
The margins on loans have decreased significantly as shown by much lower effective interest rates relative to inflation.
The effort associated with loans have been reduced significantly as credit checks, automated repayment, etc have reduced the risks and overhead. Competition between banks means their profits are a function of costs, thus driving down costs has reduced in the overhead on loans.
The richest 1% own half the wealth in the world and the gap is getting wider. Since 2020, for every dollar of new global wealth gained by someone in the bottom 90%, one of the world’s billionaires has gained $1.7 million. (Source: https://www.globalcitizen.org/en/content/wealth-inequality-o...)
So yes, some of the wealth is going to your retirement account. But for every penny going to a middle-class professional workers retirement, there's about a thousand dollars going to some hedge fund manager or the trust fund of the grandson of some robber baron who got rich a hundred years ago.